Forecasting Chinese Households’ Demand from Home Production

As the Chinese market economy expands and market institutions become stronger, there will be more incentives for Chinese households to substitute market activity for home production.The goal of this paper is to provide a quantitative analysis of the potential Chinese consumer demand for household services. Using dataset from the American Time Use Survey and the China Health and Nutrition Survey, I compare households’ demand for services and home production between US and China. A standard choice-theoretic model of the household is used to estimate the structural parameters and to quantitatively forecast Chinese households’ service demand.